May 24, 2000

Washington
Loosens Restrictions on Sales of Weapons to Allies

By CHRISTOPHER MARQUIS

WASHINGTON, May 23 -- Sobered by shortcomings in the NATO alliance in
the battle last year for Kosovo, the Clinton administration is
overhauling its controls on arms exports to friendly nations for the
first time since the end of the cold war, American officials said
today.

Secretary of State Madeleine K. Albright is to
announce steps in Italy on Wednesday to greatly reduce the red tape
involved in the licensing of technology sales, information sharing and
joint ventures between governments and contractors within NATO, Japan
and Australia, the officials said.

The American package will increase the number of
staff reviewing defense-related licenses by 50 percent and render
decisions in as little as 10 days, the officials said. It would
facilitate foreign bids on Pentagon programs, ease Americans' contacts
with foreign counterparts within the same company, and allow for
American exports of entire arms systems under a comprehensive license.

The measures also would clear the way for
trans-Atlantic military mergers, which Western European officials and
industrialists have long sought in order to gain access to the
lucrative American market.

The administration's package seeks to lure allies
to align their non- proliferation standards with Washington; it
designated Britain and Australia, close allies, for licensing
exemptions.

American contractors welcomed the change. They
have pressed for greater access to European markets, especially as
NATO members ponder substantial new investments. The United States
spends $25 billion for military research and development, and Europe
spends about one-third as much.

"Lockheed has been supportive of
streamlining licensing procedures and welcomes this step," said
Hugh Burns, a spokesman for the Maryland-based defense contractor.

Pentagon officials said they hoped to foster a
more competitive atmosphere in which good ideas transcend borders and
percolate up from researchers. One administration official faulted the
current procurement regime as "a communistic system where
you're doing it from the top down." In Kosovo, United States
weapons routinely outperformed European systems.

Analysts say the shift by the United States
reflects a calculation that a stronger alliance outweighs the risk of
undercutting nonproliferation efforts.